PROVIDING STABILITY IN AN UNSTABLE WORLD

By Kerry Brown

The annual plenums of the Communist Party of China （CPC） Central Committee have become， in recent years， the moments when former strategies are reviewed and new policy initiatives are announced. They have acquired a thematic rhythm since 2013， with each plenum dealing with a specific set of issues.

In 2013， questions on marketization and stimulating reform were addressed. In 2014， the focus shifted to legal reform and the creation of more certainty and predictability through the rule of law in the commercial realm. In 2015， the main issue concerned the launch of the 13th Five-Year Plan （2016-20）， with its macroeconomic narrative for China traveling toward achieving the first of the Two Centennial Goals—the delivery of middle-income status by 2021.

The year 2016 marks a moment in a pathway of transition. It is the start of a yearlong process toward the 19th CPC National Congress， where there will be leadership changes， the issuance of new strategic notices， and the review and consolidation of Party ideas and policy. The congresses， held every five years， are the most important event in Party building and development. The upcoming one will set out the core parameters of the all-important march to 2021.

The major themes of this years plenum are to review and then take forward the anticorruption struggle and to address issues of equity and efficiency. These are partly focused on internal issues and partly dependent on the external situation.

Anti-corruption drive

This anti-corruption drive has been ongoing since 2013 as one of the key pillars of Xi Jinpings presidency， attracting headlines around the world owing to the number of highlevel targets，and its extensiveness and length. Since 1978， there has never been such a long campaign of this type. Investigators have moved from state sector companies to government ministries and provincial governments and up to the very top of the Party itself， into the Central Committee and even the Political Bureau. This has been unprecedented.

The anti-corruption drive has， of course， produced some dramatic headlines. But， what has been less addressed is the political drive behind it. In the 2000s， after Chinas entry to the World Trade Organization （WTO） and during an era in which growth and wealth creation ran into overdrive， many officials and business people across Chinas society confused political and economic duties. Embezzlement and larceny became widespread. The danger toward the government and its legitimacy was recognized by then Premier Wen Jiabao， who stated that corruption was the greatest threat to Party rule.

This was a consensus amongst the leadership back then， figuring prominently in the choice of leaders selected at the 2012 CPC National Congress. Their mandate was to clean this issue up and to create clear political， administrative and intellectual divisions between the realm of politics and that of business. In essence， the Party occupied prime responsibility in the former realm； other entities filled the space in the latter.

The 2013 plenum began mapping out this division of responsibilities. For business and other private agents of economic action， the market was embraced and seen as necessary for further development and reform. However， the plenum clearly stated that in terms of overall political guidance on market direction， the Party and the state would still play what was called a decisive role.

In 2014， this position was supplemented by an accompanying legal narrative. There would be more certainty in contract and business law， greater reassurance over enforcement， and real clarity in the funding and responsibility of courts and judges. There has been greater consistency in applying the rule of law and less ambiguity on how it functions.

The anti-corruption struggle is a key mechanism to enforce political focus， discipline and clarity between Party agencies and others in society. It clearly marks the boundary between the realm of politics and that of wealth creation and business， a line which had previously been blurred.

The restoration of greater clarity to the Partys role in society is important. Regarding it simply as an extension of the economic infrastructure of China is no good. It has to openly address more complex aspects of society—visions for its future， aims for its long-term development， and ideas about how to deal with not just the well-off and successful in society， but others as well. Balanced social development has become a critical mission in contemporary China.

Equity and efficiency

This brings us to the second major theme of the plenum： equity and efficiency in society. In the 1980s， China， despite its underdevelopment， was a nation with high levels of equality. Since then， according to the Gini coefficient measurement， it has been afflicted by the same rising levels of inequality as many other nations. China is now a country of contrasts. The top-level elite are amongst the wealthiest on the planet. The poor， however， are still numerous. They cannot be neglected.

Chinas challenges are shared across the world. Societies in the last two years in Europe， the United States and further afield have witnessed plenty of anger directed at the uneven spread of benefits from globalization. The language of globalization used to be almost universal a decade ago； it was regarded as an unqualified good that everyone had a right to.

Now， however， there are plenty of dissenters. In the UK， the vote in favor of leaving the European Union on June 23 was part of this trend—disenfranchised and largely ignored communities， who felt they had received no real benefits in terms of wages and improved living standards from globalization， took revenge against political elites at the ballot box. In the United States， the 2016 presidential election has been characterized by simmering anger against free trade deals， foreign competitors and the Wall Street finance sector， which is regarded as producing benefits for a tiny minority.

The manifestation of this phenomenon in China has been different from elsewhere， but this should not detract from the fact that it has been driven by the same causes—stagnant living standards for many who have not shared in the prosperity from globalization， falling wages， and rising living costs. A number of Chinese feel that they have not seen the benefits they were expecting from economic development and reform.

In the last few years， the Party has been attempting to craft a message for this sector in society， while still reaching out to the strongly aspiring emerging middle class. The Chinese dream has been part of this—an appeal to everyone to show they can gain from and feel part of societys overall grand vision. Part of this has been about forging a sense of fairness in society and ensuring everyone must play by the rules（back to the anti-corruption struggle）. Another has been to set out an overarching objective of ambition and aspiration which goes beyond delivering rises in material living standards and GDP. Finally， to return to the words uttered by President Xi the first day he emerged as Party leader in November 2012， there have been concerted attempts to reduce the gap between the Party and the wider society.

Chinas external environment is now clouded by uncertainty. During the great financial crisis of 2008， Chinese leaders talked about the global lack of clarity. This has become far worse. From the United States to the European Union to Russia， East Asia and the Middle East， there are now a host of economic， political and social uncertainties. Leaders in countries like the UK are being posed questions for which they seem to lack clear answers， as they attempt to juggle the demands of finding new sources of growth with the issues of inequality mentioned above.

Since 1978， Chinas reform and opening up have depended on a benign and stable international environment for the nation to grow， develop and address its internal challenges. But this environment is now blighted by a whole host of highly uncertain issues. For China， therefore， while the 2016 plenum allocated discussion to domestic issues， the link with the outside world has never been stronger or more urgent. The difference this time is simply that Chinas role as a supplier of stability and predictability， in terms of its economic engagement and geopolitical role， has never been clearer or more necessary.